New York (AFP) – Boeing reported a surge in first-quarter profits on Wednesday and lifted its full-year earnings forecast following a strong performance in commercial aviation and defense programs.
The aerospace giant reported earnings of $2.5 billion, up 56.9 percent from the year-ago period. Revenues rose 6.5 percent to $23.4 billion.
The results again reflect broad health in commercial aviation as the airline industry enjoys a more stable financial period and as flying becomes much more common in the Middle East, Asia and other developing regions.
A big player in China, Boeing has often been seen as vulnerable to a trade war between the United States and China, a possibility that topped Wall Street’s list of worries earlier this month but has receded of late amid softer rhetoric between Washington and Beijing.
In the quarter ending March 31, Boeing notched higher commercial plane deliveries compared with the year-ago period. Models with gains included the narrow-aisle 737 and the 787 “Dreamliner” plane.
The aerospace giant has been consulting with customers on launching a possible “middle market” plane that would fall between its narrow-body market, which carries up to 200 people and its wide-body design, which typically flies around 300.
The company said it would raise production for the Boeing 767 plane from 2.5 to 3.0 per month due to strength in the cargo market as industrial demand picks up.
– Tanker project’s possible delays –
Earnings in Boeing’s defense division were lifted by strong weapons volume. Boeing won new business from Kuwait and said it was making progress on the KC-46 tanker program, a US Air Force transport aircraft contract that has led to unexpected cost increases in prior quarters.
A report earlier this month by the US Government Accountability Office warned that deliveries of the first fully capable KC-46 tankers could slip to May 2019 from the current timetable of October 2018, citing a number of risks to the timeframe that need to be mitigated.
These including the need to speed up flight tests and update the timetable for certifying aircraft “to reflect a more realistic schedule.”
Other key questions surrounding Boeing include the status of talks with Brazilian company Embraer on a potential collaboration that must be blessed by the Brazilian government.
Boeing also could be impacted if President Donald Trump scotches the nuclear agreement between Iran and major governments that opened the door to commercial plane sales in the sanctions-constrained country.
Boeing confirmed its full-year revenue forecast, but lifted full-year forecast earnings range from $13.80 to $14.00 per share to $14.30 to $14.50 per share, excluding pension costs.
“Our team’s strong first-quarter performance, combined with the positive market outlook across our businesses and our confidence in executing on our production and development programs, gives us a solid foundation to raise our guidance for the year,” said Chief Executive Dennis Muilenburg.
Shares 3.5 percent at the open on Wall Street, lifting the Dow Jones Industrial Average to positive start after Tuesday’s sell-off.
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